AT&T has confirmed it is acquiring programmatic adtech stalwart, AppNexus, ending a week of speculation about a deal and more than a year of questions around whether AppNexus would file for an IPO.

While financial details of the deal have not been disclosed, the Wall Street Journal suggested the acquisition could be worth US$1.6 billion, citing sources close to the deal.

According to previous media reports, AppNexus filed papers for an initial public offering back in 2016 that gave the company a valuation of up to $2 billion. It’s also raised US$321.5 million in venture capital since debuting on the market 10 years ago. In addition, analysts have previously pegged the company’s market value at $1.2bn.

In a statement, AT&T said the acquisition would accelerate the growth of its advertising platform and unite real-time advertising analytics with its premium TV and video content. AppNexus will become part of AT&T’s advertising and analytics division, led by CEO, Brian Lesser.

AppNexus provides a global advertising marketplace for buying and selling ad inventory programmatic, as well as ad serving technology for publishers, agencies and marketing teams.

Lesser said the desire to invest in adtech was behind the decision to buy the “strongest player in the space”.

“AppNexus has scale of infrastructure, advanced technology and diverse talent,” he said. “The combination of AT&T advertising an analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”

AT&T said it will continue to invest and build on AppNexus’ core technology, which will now be integrated with its first-party data, premium video content, such as Turner Networks, Audience Network and Otter Media, and distribution. The purchase also gives AT&T a much wider global footprint including a presence in Australia and the Asia-Pacific.

“Innovation is core to the heritage of both AT&T and AppNexus, and we have an exciting opportunity to chart the future course of advertising together,” said AppNexus CEO, Brian O’Kelley. “Combining AT&T’s incredible assets with our technology, we will help brands and marketers power new advertising experiences for consumers. It’s what the market is asking for, and together we’re poised to deliver it.”

The deal is expected to close in Q3, subject to regulatory and closing conditions.

AppNexus, like many in the adtech and martech sphere, hasn’t been averse to making acquisitions itself. Among those completed in 2014-2015 are cross-device advertising startup, MediaGlu; ad serving platform, Open Adstream; and cross-channel revenue and inventory management player, Yieldex.

In a blog post on the deal, Forrester VP and principal analyst and former MediaMath CMO, Joanne O'Connell, said the acquisition ticked a number of very big boxes. The first is that its adds adtech weight to AT&T's fresh combination of content made possible through the recent acquisition of Time Warner.

Secondly, the deal gives AT&T access to digital advertising points ad channels like display and video across desktop and mobile overnight. It's also a big potential win against goliaths, Facebook and Google, in terms of data sets.

"AT&T and Time Warner, individually and collectively, are sitting on a massive pool of first-party data," O'Connell commented. "Even better: Accurate, deterministic first- party data. Their direct relationships with millions of consumers mean they can build a scaled identity graph, increasingly necessary for omnichannel media buying in a fragmented world where cookies are crumbling and good consumer ad experiences are more important – and elusive – than ever. And what are Facebook and Google, really, other than data-driven, cross-channel access points to a scaled network of consumers?"

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